New to the Channel? Take our Advice
We’d like to welcome our listeners to our Channel Partners MicroCast audio series. I’m Carolyn Bradfield, CEO of Convey Services, a technology specialist that runs an informational portal network in the channel used by over 23K sales partners. In the next couple of minutes, we are going to focus our time on vendors that are new to the channel, pointing out some of the misperceptions they have about developing a channel program that will likely cost them time, money, and results.
What used to be the traditional telecom channel has grown by leaps and bounds over the years transforming the type of services that are being offered attracting vendors that focus on cloud services, security, the internet of things, mobility and a host of other offerings that were not around 5 years ago.
If you are one of those new vendors, it’s easy to get sucked into the idea that engaging the tens of thousands of sales partners in the channel will give you an immediate pathway to revenue. It almost never happens as quickly as you think it should, it’s much more difficult to get traction than you planned for, it costs more than you budgeted for and it's much harder for the new guy on the block to succeed.
Well then how does a new vendor break in without breaking the bank and leverage those thousands of revenue producers calling on customers that could buy your services? Let’s take a look at some of the common misperceptions and mistakes that vendors make that will derail their chances of having a solid channel program.
Mistake #1: Thinking that revenue will happen overnight
Although there are thousands of sales partners in the channel, there is no pathway to getting rich quick. Companies need to understand that growing channel revenue takes time. It starts by developing relationships with master agents who have sales partners that affiliate with them to sell through their vendor contracts and get paid a commission.
Next you have to get known by the individual sales partner so that he or she knows you are out there, understands what you sell, knows the type of customer you want and gets how they make money when they represent you. Getting to know those partners requires that you eat a balanced diet including showing up at regional meetings, trade shows and events along with an online presence so partners can find you, read about you and begin engaging. It just takes time.
Mistake #2: Not being willing to invest
A solid channel program takes time and investment dollars. Failing to allocate budget dollars for a channel program and understand how much you should invest is a sure-fire recipe for not spending enough to get a solid footing in the marketplace. Companies must be willing to add infrastructure to support administrative processes such as commissions and quoting, add people to connect with sales partners and their customers, and add marketing dollars so partners will know you are out there.
Mistake #3: Not understanding the master agent
Invariably, we see vendors that think they’ve achieved the pathway to success by getting a contract with the largest master agents who have the most sales partners. Those vendors seem to be willing to invest thousands of dollars in marketing development funds to get those thousands of partners to notice them. But then nothing happens. Agents don’t know who they are and no deals are flowing in.
Consider that the largest master agents in the market also have the most vendor relationships. If you are only 1 of 300 vendors, it’s harder to stand out in a crowd. Sometimes a more-regionally focused or specialized master agent can give you better results. Consider what type of sales partner a master agent specializes in, what they are willing to do to help you, and if those big MDF funds are really necessary.
Remember that bigger does not always mean better in the channel.
Mistake #4: Failing to define who you are
It’s rare when we see a vendor that can be all things to all people. But often vendors will promote themselves that way. The reality is that you have a sweet spot, an ideal customer that sees your service, gets it right away, and most often buys from you vs. your competition. Partners need to understand the vertical markets that the ideal customer comes from, what business need your solution addresses, and the characteristics of that company such as their size. It’s much more powerful to say that you are a HIPAA compliant hosting service focused on medical practices than to say you are a cloud hosting provider. Don’t be afraid to narrow who you would like the partner to focus on.
Mistake #5: Thinking that all sales partners are created equally
Just as there is an ideal customer profile, there is also an ideal partner profile. Think about the type of person you would have the most success with. If your solution is complex, then the partner that sells solutions to the mid-marked vs. the SMB might be better for you. You might be better off with a managed services provider who understand complicated integrations vs. a traditional telecom agent. It’s important to know who you should focus on because focusing on 20,000+ sales partners is an impossible task. You might spend all of your time returning quotes to partners that are not well equipped to sell your services with none of those quotes turning into accounts.
Mistake #6: Overcommunicating
Partners don’t have the time or the bandwidth to learn all of the complexities of how your service works, yet vendors make the mistake of trying to give them a full understanding of the features. You need to think higher level. Partners want to know who your ideal customer profile is, when they find that customer, what do you want them to do....should they refer, set up an appointment, get a quote, and how they make money. Stick to the overview, not the details and partners are more likely to pay attention. That’s why so many vendors create a 1-page battlecards as an overview.
Mistake #7: Not explaining how partners make money.
Sales partners are independent business owners and they live and die based on the commission checks that come monthly. If they are unclear about how they get paid, what their commission opportunities are, and any special incentives you have to motivate them, I guarantee you that they will not pay attention to you. You might be competing against services that pay high commission dollars like SD WAN, and if so, you might want to make the case that your service adds to the incremental revenue an existing customer by selling more things to the same customer.
Mistake #8 Not eating a balanced diet with your promotional strategy
Marketing to partners is all about rising to the top of mindshare and staying there as long as you can. It’s great to have face to face contact through events or shows, and it’s also great if you can get someone to attend your webinar. But be clear, partners don’t retain as much information as you think they do. Once the event is over and the webinar concludes, they are on to other things. You have to layer in a good online strategy that reinforces your message and gives partners the tools to represent you in the marketplace.
The bottom line is that channel is an ever-expanding marketplace, attracting new partners, and new opportunities for your business to get more feet on the street and generate more revenue. Vendors that are new to the channel need to remember that:
- Developing a channel program takes time
- It requires investment
- It needs you to understand the role of the master agent and sales partner
- You have to be clear about who you are, who you sell to and how partners can make money with you
- You have to be succinct and focus on the information needed for the partner to gain interest and refer the right deal.
- You have to have a balanced approach, so that you combine in-person, virtual events and an online strategy to stay top of mindshare.
Convey offers a Channel Accelerator program to help newer vendors navigate the world of the channel, avoid the pitfalls that cost them time and money without delivering results, and have a strategy to attract the right partner and stay top of mindshare with them.
This is Carolyn Bradfield and you’ve been listening to our “MicroCast” in our Channel Partner Program series.